Contents

session.1
Problems of ICO
session.2
Cryptocurrency value
session.3
Fund management
session.4
Social responsibility
session.5
Excessive greed
session.6
UAICO
session.7
Schedule
session.8
Growth goal
session.9
ICO region
session.10
Disadvantage
session.11
DAICO vs UAICO

New ICO model with asset-based cryptocurrency minimum value maintenance and investor protection

online meetup by—Harborteam

UAICO

Intro - Problems of ICO

Today, I would like to introduce Harbor Token. First,I want to point out some problems of ICO’s these days and tell you how we, Harbor Token, will try to fix such problems. Recent ICO have problems such as monetary value instability, operational risks and regulations, unfair distribution, excessive greed, social and economic responsibilities, currency issue area, mistrust and inefficiency.

Risk of formation of cryptocurrency

First of all, I would like to talk about the value stability of cryptocurrencies. The values created during the ICO process can be divided into three. First, there is the issuance value when the cryptocurrency is issued for the first time. Second, there is an incoming asset value when an ICO participant exchanges a new cryptocurrency for investment purposes with Bitcoin and Ethereum. Third, there is the future value created through the commercialization of the technology or business model that the project aims to achieve. After ICO, The incoming asset value will decrease as time goes by as, it will be used for technology development and commercialization. But the future value must increase. In the end, the value of the new cryptocurrency will be maintained as all incoming asset value shall be consumed, but the future value created shall generate a new economic ecosystem. However, this kind of technology development or business are not always as successful as expected. Unlike BITCOIN or ETHEREUM, whose value has already been established, the value of the newly created cryptocurrency is uncertain. Currently, too many cryptocurrencies are being issued through ICO, the environment being changed so that new cryptocurrency is hard to survive.

Risk of fund management

Next, there are risks in fund operations. Many ICO companies have established foundations and are fundraising through them. In general, foundations have many benefits but at the same time, they have appropriate social responsibilities. The Foundation is a social institutional system that allows transparent management of the fund with specific purposes. In the event of misuse of funds such as for the other purposes than the original purpose of the foundation or operational problems, even unintended, the establishment of the Foundation can be canceled by the State, and all assets of the Foundation may be frozen or confiscated. When the Foundation is established in a country that does not have good legal system for the transparent and the fair management, there is possibility of deceptive fund management. Therefore, it is very important to choose the right area for the issuance. We have divided the currency issuance regions into three categories. The first category is the areas which are notorious for tax evasion such as the Cayman Islands and the Virgin Islands. In this case, legal and institutional regulations are so fragile that it is difficult to identify fraudulent funding and misuse of funds. Therefore, it is high-risk area. The second category includes the countries like Zug in Switzerland and Singapore which have positive attitude for the issuance of cryptocurrency and have reliable financial and regulatory system. Although they are now known as the most appropriate areas to issue cryptocurrency, these countries are gradually moving toward putting more regulations and asking stricter fund management. The final and the third category is the area where the business is performed. However, since many countries have regulations in practice, cryptocurrencies are being issued in areas where legal risk can be avoided. Currently, many startup companies in the US, China, Korea, and Japan are conducting ICO projects. And many of them issue their cryptocurrency overseas, due to legal regulations. But if the cryptocurrency is issued in a tax heaven or tax evasion area, there is a risk of trust. Additionally, it can be difficult to operate the assets in the tax heavens area. Even if the cryptocurrency is issued in a region that has positive attitude toward cryptocurrency, there may be high operating cost, and legal risks when the fund is transferred back to the issuing party if the currency is issued in a different area.

Social responsibility

Next, there are issues about the social and economic consensus on the cryptocurrency why. The cryptocurrency market has grown tremendously and has evolved into one of the major assets, such as real estate and equities. The increasing socioeconomic influence of this cryptocurrency can affect not only the cryptocurrency community but also all members of the society, thus the need for regulation by governments and financial authorities is heightened. For example, just like real estate or stock market, price surges and collapses of cryptocurrencies affect not only those who have cryptocurrencies but also the society as a whole. Therefore, appropriate government controls and regulations are required just like real estate or stock market. Therefore, the issuance of cryptocurrencies through ICO involves social responsibility and requires a responsible organizational structure for trust. In order to maintain a stable currency value even after issuing the currency, we must develop technology and generate profits with a reasonable and efficient organizational structure.

Excessive greed

Next problem that we will talk about ICO is the greed. Many ICO are aiming for excessive fundraising. Some are seeking to earn money through ICO, and some are raising funds through ICO with unrealistic and infeasible ideas. In the process of allocating the asset values generated by the ICO, not only all the rights of the incoming asset value such as ETHEREUM or BITCOIN, but also share of the founders and a part of marketing and commercialization fund are included. So the asset allocation becomes unfavorable to investors. A private sale prior to ICO would violate the interests of ordinary investors as it sells too many coins at a low price to capitalists and speculators. I think that introducing excessive discount rate at each stage of ICO, and presale to induce unreasonable allocation of money, and hasty investment decisions among investors through information asymmetry is an issue, that needs to be improved to form a healthy cryptocurrency market.

UAICO

Harbor Team has considered fairness, transparency, legal constraints, responsibility for the society and economy, protecting investors, maintaining the value of cryptocurrency, and making cryptocurrency that can survive intense competition to resolve such problems. Therefore, we would like to propose a new ICO model, which we named underlying Asset ICO, UAICO in short. The followings are the characteristics of UAICO. It is an asset-based currency, a currency with the power to protect investors and the issuer has the authority to issue the currency. I think that this model of cryptocurrency would be the new standard for issuance of the cryptocurrency for the business that can generate long-term profit. Basically, UAICO is a currency that makes all of cryptocurrency invested through ICO underlying asset using smart contract. All ETHEREUM invested by investors in ICO will be stored in smart contracts to form an underlying asset and maintain minimal value, regardless of the business performance or technology development of the issuer. When new coins are distributed, most of them are allocated to investors, but some are reserved for development cost and share of the founder so that it can pursue development and commercialization. For example, if 30,000 HBR is issued with the fund of 1 ETHEREUM, and an investor invests 1 ETHEREUM, the actual HBR allocated to the investor shall be 21,000 HBR. 6,000 HBR will be allocated to the development cost and 3,000 HBR will be allocated to the founder. Investors can choose to withdraw investment at any time, and if they transfer their HBR to an ICO contract, they will be able to get 0.7ETHEREUM for the full amount of money supply. The withdrawn HBR is incinerated to maintain its overall value stability. We named it UAICO because it keeps the minimum value as thes investment is converted to the underlying asset. In UAICO, most of the rights of the assets from ICO belong to investors, while in general, ICO founder has the right of the invested fund and even some of the newly issued cryptocurrency. The investment risk is reduced, as all assets that have initially been invested will maintain the value of new cryptocurrency through smart contracts, and investors can get some of the initially invested assets at any time through withdrawal of the investment. Unlike DAICO, it is possible for individual investors to make independent decisions, rather than making a decision through voting. Even if some investors withdraw their investment during this process, the fund needed to carry out the ICO project remains intact, so technology development and commercialization can be performed without difficulties.

Schedule

UAICO of Harbor Token will take place for a month. There will be no private sale or presale. We do not induce hasty decision of investors and do not offer a discount rate of more than 5% for the relatively fair distribution of cryptocurrencies. We encourage investors to consider the price volatility of the cryptocurrency during the sales period rather than making investment decisions based on the discount rate.

Growth goal

Harbor Token aims to grow in the long-term competitive cryptocurrency market as a currency with issuing authority. We will perform ICO not only with Ethereum but also with Bitcoin or other various cryptocurrencies to grow its asset value continuously. In the initial stage, the token value is linked to the value of Ethereum, so it can react sensitively to the price change of Ethereum. However, in the future, I think that it will be possible to build independent value by including various cryptocurrencies into the asset portfolio and thereby escaping from the close interoperation with a certain cryptocurrency. In the long run, we expect to be able to increase the stability of the entire cryptocurrency market by accepting currencies with uncertain future value.

ICO region

Determining the issuance area of cryptocurrency is an important factor in building trust with investors and subsequent commercialization. And I think that economic activities such as currency issuance, software development and commercialization should have social responsibility. However, in reality, there are regulatory risks from the government and financial authorities, and we have recognized the need to make the right decision in order to avoid such risks and improve the efficiency. With long time deep considerations, it is decided to issue and commercialize Harbor token in Korea. In addition, we have established the Harbor Data Foundation in Singapore as Plan B in case government regulations or other issues arise before or after the ICO. In case of a problem, all the works related to the issuance of the cryptocurrency can be transferred to the Harbor Data Foundation. One of the reasons why we decided to issue cryptocurrency in Korea is that the legitimate status of cryptocurrency in Korea is uncertain and there is a lack of legal basis to prohibit the issuance of cryptocurrency. There are issues of equity and consistency of the regulatory policies, as the local government issued cryptocurrency and the Seoul city is planning to issue another one even after the government banned the issuance of cryptocurrency. Although the government's regulation in the initial stage can be considered as an appropriate measure to protect investors but the prohibition of the issuance of cryptocurrency is an excessive restriction of the rights guaranteed by the constitutional value of free economic activity. We have developed a cryptocurrency issuance model that protects investors, and I think there shall be a proper way to protect some of the investor's rights with the issuance of cryptocurrency. Through this method, we can satisfy both of the two agenda such as the original purpose of the government regulation and the activation of economy through technological development and commercialization of cryptocurrency.

UAICO disadvantage and alternative

Although UAICO has various advantages such as maintaining the value of basic assets of cryptocurrency and protecting investors, it has a problem that it is difficult to obtain enough funds for development and commercialization because there is relatively less asset that can be managed by the founder comparing to the existing ICO methods. We perceive this issue. Wfefƒ completed the P O C verification process for the development possibility and business feasibility of the Harbor Platform which is the purpose of issuing the Harbor Token. We developed a prototype of the Harbor Platform to further refine it, developed a program to find a color combination that matches the selected color, called Color Mate and applied it to the prototype of the Harbor Platform. Color Mate supports Windows and Mac. Users can purchase license or get refund of the purchased product with cryptocurrency using the prototype In-app Wallet of the Harbor Platform which is applied to the Color Mate. Although it is not perfect yet and there are still some issues to be commercialized, it aims at verifying technology development potential and capability. I think we can reduce the concern that the project may fail because relatively less fund is allocated for the development, which is a shortcoming of UAICO through P O C or prototype product development.

DAICO vs UAICO

The DAICO type ICO gives unfavorable conditions for start-up companies comparing to the existing ICO, but it has nevertheless a very favorable condition comparing to the non-ICO general project funding. UAICO can be seen as a result of efforts to improve existing ICO like DAICO. However, the concept and application of the two models are a little different. DAICO is a method integrating ICO and DAO. This enables the invested funds to be used little by little for a certain period of time by certain rules or to make important decisions such as dissolution of assets through votes of cryptocurrency investors. This approach is appropriate for a creative and innovative project although it has unclear revenue model. However, it is still a conceptual model. When it is applied, unfair rules may be applied to it. There is also a risk of wrong decision of the group to pursue profit. UAICO is appropriate for the project such as business model. The statement that it is suitable for the business model means that there is a revenue model, that commercialization can be done with a relatively small amount of initial fund, and that the business can grow by creating added values. Therefore, most of the invested assets are used to form the underlying asset value of the currency. We reduce the risk of investors and ensure that investors have independent rights to make decisions about asset disposal. Some ICO aim to create added value through ICO itself rather than developing new technologies or commercializing a business model. UAICO provides an opportunity for technology development and commercialization by granting the rights of most asset values to investors and the currency itself, and providing the start-up companies with the minimum amount of fund needed for product development. At the same time, it forces start-up companies to make efforts for the profit of investors and the company. Successful technology development and commercialization provide a good incentive for founders through the leverage of stake of the founders. We also expect it can contribute to building a sound cryptocurrency economy by maintaining the minimum value of issued currency regardless of the business performance of the issuer.